Good: Chapel Hill's Cempra $25M richer; Not so good: Dilution

Okay, first the good news — Cempra, a drug development company in Chapel Hill that trades on the Nasdaq exchange, raised $25 million through a private sale in the past week.

Now, the bad news — the company’s current shareholders must hate it. The private sale diluted their holdings.

On Oct. 24, Cempra (Nasdaq: CEMP) sold 3.86 million shares in a private placement for $6.50 a share. The following day, on Oct. 25, Cempra registered all those shares on behalf of about a dozen institutional investors, making them available on the public market. That took the outstanding Cempra shares from about 21 million to nearly 25 million shares.

Because Hurricane Sandy was still wreaking havoc in New York, shutting down all stock trading in the process, it was unclear Tuesday morning how this would affect the stock price.

As of Friday’s close, Cempra’s shares traded at $6.65 each, though that could change when the markets open again after the storm.

Before selling the shares, Cempra announced the $25 million would be used for “general corporate and working capital purposes, including the funding of clinical trials.”

Based on the private sale, Cempra’s total value would be pegged in the $161 million range, though the market capitalization, or the value set by the market, could also change when markets open again after Sandy passes.

CEO Prabha Fernandes has built up a notable list of institutional investors, although many of them are venture capital firms that may not be there in Cempra’s life for too long.

New York’s Aisling Capital and Deerfield Management Co. have bets on Cempra. So has Quaker BioVentures and I.Wistar Morris III from Pennsylvania. Durham’s Intersouth Partners lists itself as one of Cempra’s original investors as well.

As a group, institutions own 64 percent Cempra; executives and directors collectively own 42 percent.